The Institute of International Bankers (IIB) submitted a comment letter supporting the U.S. banking agencies’ proposal to recalibrate regulatory capital requirements to reduce disincentives for large banking organizations to participate in the U.S. Treasury (UST) market, while urging a broader set of reforms beyond adjustments to the enhanced Supplementary Leverage Ratio (eSLR). The IIB argued that changes spanning leverage capital, risk-based capital and stress testing, including for U.S. intermediate holding companies of international banks, would more effectively advance the proposal’s aims. Key recommendations include targeted adjustments to risk-based indicators with respect to USTs, excluding Category III bank holding companies (BHCs) and intermediate holding companies (IHCs) with under USD 250 billion in total assets from the Supplementary Leverage Ratio (SLR), and recalibrating the Tier 1 leverage ratio to 3% for BHCs and IHCs in Category III and below. The letter also calls for revisions to stress capital buffer requirements to better calibrate risk profile tests and a downward recalibration of internal total loss-absorbing capacity requirements.
Institute of International Bankers 2025-08-26
Institute of International Bankers urges US banking agencies to broaden enhanced supplementary leverage ratio recalibration and tailor leverage, capital and stress-testing rules to support U.S. Treasury market activity
The Institute of International Bankers supports U.S. banking agencies' proposal to recalibrate regulatory capital requirements to encourage large banks' participation in the U.S. Treasury market, advocating for broader reforms beyond the enhanced Supplementary Leverage Ratio. Recommendations include adjusting risk-based indicators for U.S. Treasuries, excluding certain banks from the Supplementary Leverage Ratio, and recalibrating the Tier 1 leverage ratio and stress capital buffer requirements.